China cancels deliveries of Brazilian soybeans due to poor quality

China has stopped receiving shipments of Brazilian soybeans from five companies after the cargoes did not meet phytosanitary requirements, two sources with direct knowledge of the matter told Reuters on Wednesday.

Brazil has suspended shipments to China from Terra Roxa Comercio de Cereais, Olam Brasil and C.Vale Cooperativa Agroindustrial since January 8, one of the sources said.

According to the source, on January 14, Chinese customs suspended shipments from Cargill Agricola S A and ADM.

The concern arose after some shipments were found to have chemical contamination, pests or insects, the sources said.

“When we try to clear the soybeans shipped by these five companies on the customs website, we cannot continue to work,” said a second source, a trader at a soybean processing plant in China.

It is unclear how long the suspension will last, although traders expect it to be short-lived.

“It depends mainly on how quickly the Brazilian companies can provide evidence that they have figured out what was wrong that led to these discrepancies and provide a plan to correct them,” the first source said.

China buys more than 60% of soybeans shipped worldwide, and Brazil has become its largest supplier in recent years.

The companies whose shipments were suspended are among the leading suppliers of soybeans to China.

“We are taking this seriously,” a representative of one of the affected companies told Reuters. He declined to be named due to the sensitivity of the issue.

Tags: China, Brazil, soybean